What if my back taxes are more than the house is worth?
Then a cash sale probably isn't enough — the back taxes would exceed the sale proceeds. In that case, negotiating with the city or exploring other options is necessary.
Seller Situation
Selling a Philly house with back property taxes.
If you're behind on Philadelphia property taxes, the city can take your house. That's the hard truth. But it takes time, and you have options along the way. Here's what those options look like.
What You're Dealing With
Property taxes in Philly pile up fast. A $2,000 annual bill that goes unpaid can balloon to $8,000-$15,000 with penalties, interest, and city collection fees over just a few years. The paperwork gets scary — water bills, tax bills, legal notices.
We buy houses with back taxes regularly. You don't have to clear the taxes before selling to us. The unpaid amount gets paid out of the sale price at closing.
Your Real Options
Three honest paths
Option 1 · Payment plan with the Philly Tax Center
If you want to keep the house, call the Philly Tax Center first. They offer payment plans that can prevent sheriff sale. Works if you have some income to make monthly payments and you can commit to consistency.
Option 2 · List with an agent (tax-delinquent but pre-sheriff)
You can sell a tax-delinquent property on the open market as long as sheriff sale hasn't happened yet. Back taxes get paid at closing from the sale price. This nets the most money if you have time (3-6 months before sheriff sale).
Option 3 · Sell to us for cash
Faster than a listing. We buy with back taxes owed, and we pay those taxes at closing out of the sale price. Works when you're 2-6 months from sheriff sale and can't wait for a traditional listing. Works when the tax bill has grown too large to pay but there's still equity in the house.
When Covenant Fits
When we make sense
- You owe 3+ years of back property taxes.
- You're worried about sheriff sale but it hasn't happened yet.
- You can't afford a payment plan.
- The house has equity — sale price covers back taxes plus you walk with cash.
- You want to sell before the tax bill grows further.
Philly Specifics
Philadelphia property tax delinquency
Philly property taxes are assessed annually and due March 31. If you don't pay by December 31, the Department of Revenue adds penalties (up to 15%) and interest. Unpaid taxes become a lien on the property.
If taxes stay unpaid for 2+ years, the city can list the property for sheriff sale. Properties are sold at auction to the highest bidder (minimum bid usually covers back taxes and fees). If the auction goes through, you lose the house and any equity in it.
You can check your tax status online at tax-services.phila.gov. Payment plans are available through the Revenue Department at 215-686-6442.
Water bills and L&I fines are separate from taxes but can also become liens and affect closing. Ask for payoffs from all three at 215-686-6995 (water), 215-686-6442 (revenue), and 215-686-8686 (L&I).
Where
Neighborhoods where we see this most
Related
Situations that often overlap
Situation Questions
Questions about tax delinquent sales
Can I still sell if there's a sheriff sale scheduled?
Yes, up until the sheriff sale date. Sale has to close before the auction. That's tight timing — call us immediately if this is you.
Do you pay the back taxes directly or does it come out of my money?
Back taxes are paid at closing out of the sale price. So if we offer $100,000 and you owe $12,000 in back taxes, $12,000 goes to the city and $88,000 (minus any other closing costs and liens) goes to you.
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